BIT Research argues that the crypto market is currently moving through an adjustment phase shaped by two dominant forces: shifting policy expectations and declining liquidity. A period of easing geopolitical tensions and the stronger-than-expected performance of the SpaceX IPO had previously helped Bitcoin rebound from technically oversold levels. That rebound, however, lost part of its support after newly appointed Federal Reserve Chair Kevin Warsh delivered an unexpectedly hawkish signal, weakening the market’s earlier expectation of policy easing.
At the same time, stablecoin liquidity has continued to contract, and new capital entering the market has become visibly insufficient. BIT Research describes the current environment as a return to the kind of light trading conditions often seen during the summer. From the standpoint of current pricing, the market still lacks a macro catalyst strong enough to drive a new upward leg. Daily trading volume has dropped significantly from the highs seen in 2025, stablecoin growth has continued to slow, and the support once provided by Strategy, formerly MicroStrategy, through Bitcoin purchases funded by STRC preferred stock issuance is also fading.
Hawkish Fed Signals Remove a Key Policy Anchor
Before the latest policy shift, the market’s mainstream assumption was that Kevin Warsh would lean dovish after taking over as Fed chair. Instead, the FOMC turned unexpectedly hawkish. Several committee members indicated that if inflation pressure persists, there could still be a case for further rate hikes this year. Warsh also made clear his determination to rebuild policy credibility, adding another layer of pressure to risk assets.
BIT Research notes that Warsh’s refusal to disclose his personal dot-plot rate projection removed a clear policy anchor for markets. As a result, risk premiums increased. In the report’s view, historical experience shows that this kind of policy uncertainty is generally unfavorable for a sustained Bitcoin rebound. With policy uncertainty, weak seasonality and liquidity contraction all working together, Bitcoin’s short-term trend remains under pressure.
$73,700 and $62,446 Define the Current Technical Map
The report’s trend model shows that as long as Bitcoin remains below $73,700, the broader trend stays bearish. The key resistance level is also expected to move lower over time within that model. On the downside, $62,446 remains an important support level. If that area breaks, the downward trend could accelerate further.
BIT Research also compares the current phase with the bottom-building process seen in 2022. Under that framework, the market may spend an extended period moving sideways and consolidating before completing a cyclical low. The report does not describe this as the start of an immediate new rally; instead, it presents the current adjustment as a drawn-out clearing process that could help form the foundation for the next cycle.
Stablecoins, ETF Flows and Strategy Support All Weaken
Liquidity remains the central constraint. Daily trading volume has at times fallen to roughly $50 billion. By comparison, during the July-to-October rally in 2025, average daily trading volume was about $200 billion. Current activity is therefore only about 25% of the previous peak. With turnover substantially lower, any price recovery depends more heavily on fresh capital and supportive policy expectations, and the report finds neither condition strong enough at present.
Stablecoin growth has also slowed sharply. The 12-month rolling growth rates for USDT and USDC reached 52% and 122%, respectively, at the end of 2025. At present, both year-on-year growth rates have fallen to around 20%, while the six-month growth rate is closer to zero. BIT Research says this reflects a clear weakening of new liquidity entering the market.
Inflows associated with Bitcoin ETFs and Strategy have also declined compared with earlier periods. Strategy previously used aggressive STRC preferred stock issuance to buy Bitcoin, a move that helped push Bitcoin up by about $15,000, or nearly 20%. That support effect is now gradually fading. The market’s 30-day rolling fund flow remains in net outflow, and without a new strong catalyst, the report says it is difficult for a sustained upward trend to form.
The report concludes that inflation at 4.2% remains far above the Federal Reserve’s 2.0% target. Against the combined backdrop of a hawkish policy stance, weaker summer seasonality and insufficient liquidity, Bitcoin still lacks adequate support to remain firmly above $60,000 in the short term. Even so, as market clearing progresses, this adjustment could still build a cyclical low during the summer. The price may not begin a new upward cycle quickly, but the report frames the process as preparation for the next bull-market phase. Some of the views above come from BIT on Target, with the full BIT on Target report available by contact request.